PPP status report

IT turns out that the Public Private Partnership program is not the way media has described it – slow, ineffectual, an obstacle course with so far no results. It had some hoops to jump through, but it is off and running.

Let us start by clarifying that PPP is not privatization but a contractual arrangement between government and a private party to partner together for development. Think classrooms, airports, highways, dams, even prison facilities. Those will always be in government hands and not privatized. In other words, it will be government infrastructure, the built assets that will make life for all better in basic services, mobility, communication, social institutions, future planning and everything else that governance owes its constituents in the social contract between them. The Constitution encourages the private sector to assist thegovernment to do infrastructure.

Undersecretary Cosette V. Canilao gave the annual Ongpin Memorial Lecture on PPP. It was entitled “PPP: Where We Are At,” last Wednesday to a packed audience at the Ateneo Professional School in Rockwell, Makati City. Ms. Canilao is the Executive Director of the PPP and has an intimate knowledge of the facts and figures, the processes and results, the plans and the vision towards acquiring this country’s infrastructure needs estimated to cost $127B between 2010-2020. [A Manila Times editorial praised her presentation at the Times Business Forum last July].

Between 2010-2014 $26B has already been spent with another $30B is programmed for 2014-15. Government has funded $57B so far with a gap of $70B still to be found presumably from various sources. The next administration should be managing about $45B. It is to be hoped that whoever wins the election will see the program through.

The LRT 1 has already been bid out and won. Train stations will be the first to show the improvement that a PPP program can do to infrastructure – refurbishment of restrooms, getting the escalators and elevators to work properly and serve the commuting public better. Present cars will also be refurbished to be more comfortable and clean and punctual. New cars are expected some time next year. So that is one bid won and now on the implementing stage. Watch it take off. The DaangHari highway has opened after initial right of way issues. The beep cards usable for all the light rail lines are now a done deal. Classrooms have been built fulfilling the logistical demands of withstanding 250kph typhoon winds, even using new technology from the traditional cement and wood configurations which have shown much vulnerability in this age of climate change and the potential big one earthquake.

The Mactan-Cebu airport is under implementation with Terminal One completed through some creative configuration that has made going through it faster and more efficient as well as more comfortable. More terminals to follow. The private partner involved has gone beyond construction into marketing it as a hub for OFWs from the Visayas who need not go through Manila to get to and from their destinations. That makes the infrastructure expansively more useful.

Usec Canilao says the PPP Center learned some valuable lessons here when after the bidding was won; was discovered that the Philippine Air Force which was using some of the land had never been brought into the negotiations so that it would be prepared to transfer its facilities elsewhere. This dilemma caused undue delay because understandably the Air Force was not prepared not having been a party to the negotiations. Eventually it did but time was lost. Now the PPP Center knows enough to bring in everyone concerned or to be affected in a bidding so as not to delay matters after a bidding is won. Same with the right-of-way issue.

One of the projects for bidding which upon the request of interested would-be bidders was postponed from this month to December is the new prison facility to be built in Nueva Ecija to replace the New Bilibid Prison and its intolerable overcrowded conditions and tenuous security arrangements. It is envisioned to be a state-of-the-art humane and secure institution for the rehabilitation of lawbreakers who have been convicted. So it has more complex requirements which the bidders are trying to meet.

Other LRT lines are also about to bid out for expansion and for an addition of two new lines. The North-South railway from Tutuban to Matnog, Sorsogon is another project soon to be up for bidding.The Cavite-Laguna Expressway has been bid and won. Then coming up for bidding is the Laguna Lakeshore Expressway that will also include a dike and reclamation around Laguna de Bay. The NAIA Expressway is being implemented as well as the Orthopedic Center Rehabilitation.

All in all with the kinks and the obstacles encountered 14 projects have been bid out, 10 have been awarded and at least two completed with an accelerating number on their way to completion as building has started. One remaining kink is the need for independent consultants for each project, which seems to be difficult to fill considering the complexity of some.

You might pooh pooh the above but again the Philippines is the pioneer here in Southeast Asia on PPP. The Indonesians and the Vietnamese have been visiting our PPP Center to see how they can come up with their own using us as a model or learning how we have come along. Both foreign and local entities are interested in participating in its projects. PPP is definitely a positive road that should be continued into the next administrations.

It has had its beginnings in the first Aquino Administration with the Build Operate and Transfer law, amended during the Ramos Administration, then under another name with the Estrada and Arroyo administrations and now the improved arrangements via the PPP. The only logic in this matter of infrastructure for nation-building is moving forward and not turning back.

source:  Manila Times Column of MA. ISABEL ONGPIN